My question is about how to treat the loss for tax purposes.

Since there is a $25,000 limit on losses during a year, it doesn't make sense to depreciate a property such that the depreciation combined with other expenses will offset your income to any more than $25k per year. 

I found it pretty simple, though 3/4 the way through the only thing I've found that I didn't know was that when you sell a property at a loss, it CAN be an "ordinary loss" vs.

By the way, if this were taking place in a non community property state, I believe they would lose the capital gains exclusion altogether (since they would be taxed as a partnership).Loss of the Homestead ExemptionTechnique #2 A second technique proposed, assuming that Tim & Jennifer already have a significant investment portfolio, is to liquidate some existing investments to fund the down payment on the new home, and use the investor loan proceeds for new investments, with a goal of producing 6% (or better) average annual returns over the next 20 years (resulting in approximately $5M, or more, over 20 years).

Assuming your knowledge of the property is accurate, and there are no unknown negatives, the low LTV provides a large cushion against loss and therefore the loan would be in the lower risk category of private loans.  

All those Buy and Hold seekers of Yield are going to suffer the biggest losses in this next downturn.

Rajeev KotyanWhat they provided was based on projected loss over the life of the mortgage because of their mistake.

The good news is you can do partial disposition of the old sewer line and take the loss.

You may have passed the material participation tests and may have been able to deduct losses but you need to meet the 750 hours AND work more time in real estate than any other field to become a real estate professional. 

Doesnt help I've always hated Intuit (the parent company)I personally like Buidiums features and it makes it easier to figure out what expenses are tied to what property and I've got 7 years of history in there as well.Just takes me a click of a button when all books are updated to get income statements done, profit/loss, look at the ledger (in a much more readable format than QB in my experience) look at an individual properties performance etc.Has anyone on BP actually used Buildium's full blown accounting features, tracking mortgages, depreciation etc?